Tianshen Entertainment terminated its investment due to foreign investment, and its Internet channels were blocked

Originally planned to "marry" Beijing Xiaodu Mutual Entertainment Technology Co., Ltd.(hereinafter referred to as Xiaodu Mutual Entertainment) to strengthen the layout of the Internet video entertainment field, Tianshen Entertainment had no choice but to talk to Xiaodu Mutual Entertainment in advance due to its "special" identity. Say "break up".

Original title: Tianshen Entertainment has a special identity and is difficult to "break up" with Baidu Video

. Originally planned to "marry" Beijing Xiaodu Mutual Entertainment Technology Co., Ltd.(hereinafter referred to as Xiaodu Mutual Entertainment), Tianshen Entertainment, which strengthens the layout of the Internet video entertainment field. Unexpectedly, due to its "special" identity, it had no choice but to "break up" with Xiaodu Mutual Entertainment in advance.

As a platform for the spin-off and independent operation of Baidu's Baidu video business, Xiaodu Mutual Entertainment has attracted strategic investment from film and television media companies New Culture and Saifu Fund with a valuation of nearly 3 billion yuan. Although it has been nearly five months since Xiaodu Mutual Entertainment announced its spin-off, independence and financing, its industrial and commercial information still shows that Beijing Baidu Netcom Technology Co., Ltd. is a single shareholder.

As early as April, Tianshen Entertainment stated that in order to extend its industrial chain, it planned to invest no more than 250 million yuan in Xiaodu Mutual Entertainment. After the transaction is completed, Tianshen Entertainment will hold 8% to 11% equity in Xiaodu Mutual Entertainment.

On September 18, Tianshen Entertainment announced that Xiaodu Mutual Entertainment now needs to apply for the "Information Network Communication Audiovisual Program License"(hereinafter referred to as the License) separately due to business needs. According to relevant industrial policies and regulations, the unit applying for the license does not include foreign-invested enterprises, and Tianshen Entertainment has a foreign-invested component, which will affect Xiaodu Mutual Entertainment's processing of the above-mentioned certificates and decided to terminate the investment.

The reporter inquired about the 2016 semi-annual report of its lead investor, New Culture, and found that New Culture plans to invest a total of 410 million yuan in small-scale mutual entertainment, with a cumulative actual investment of 102 million yuan during the reporting period. The acquisition status of this asset shows that it is still under transaction.

Termination of investment in Xiaodu Mutual Entertainment's equity

Due to its "special" status, Tianshen Entertainment's plan was helpless.

As early as April 21, Tianshen Entertainment stated that in order to extend its industrial chain, it planned to invest no more than 250 million yuan in small-scale mutual entertainment. After the transaction is completed, Tianshen Entertainment will hold 8% to 11% equity of small-scale mutual entertainment; On April 27, Tianshen Entertainment determined the specific investment amount and announced that it would invest in small-scale mutual entertainment with its own funds of 192.5 million yuan. After the transaction is completed, it will hold a 10% stake in Xiaodu Mutual Entertainment.

Tianshen Entertainment announced that in April 2016, Baidu's Baidu video business was spun off and established Beijing Xiaodu Mutual Entertainment Technology Co., Ltd., committed to building the first Internet PGC (Professional Production Content) distribution platform in China.

In Tianshen Entertainment's view, this investment will promote the successful layout of its own business from game research and development to Internet channels. It also believes that it will promote the rapid development of its own movie-game linkage business, help the promotion of the company's game business, and bring new profit growth points to listed companies.

It is worth noting that Xiaodu Mutual Entertainment has not only won the favor of Tianshen Entertainment, but also attracted film and television media companies New Culture and Saifu Fund to become its new shareholders with investment of nearly 1 billion yuan. In its 2016 semi-annual report, New Culture stated that Xiaodu Mutual Entertainment has a certain industry-leading position on the video playback platform and can form good synergy with itself.

However, an announcement issued by Tianshen Entertainment on the evening of September 18 made the original plan "fall through".

Tianshen Entertainment said that it now needs to apply for a separate license due to small-scale mutual entertainment operations. According to industry-related policies such as the "Regulations on the Management of Internet Audiovisual Program Services", units that can apply for a license do not include foreign-invested companies, and Tianshen Entertainment has a foreign-invested component. Tianshen Entertainment stated that it would affect the processing of the above-mentioned certificates for Xiaodu Mutual Entertainment and decided to terminate the investment.

Regarding the impact that the termination of the plan will have on Tianshen Entertainment, the reporter called Tianshen Entertainment many times, but the call had not been connected as of press time.

It has been nearly five months since Xiaodu Mutual was

spun off. Xiaodu Mutual "brought" nearly 1 billion yuan in external financing as soon as it was spun off. Behind its birth with the "golden key" is Baidu's ambition.

Baidu launched the "Aircraft Carrier Plan" in 2015 and implemented the Small Business Division System (PGM) internally. Once it becomes bigger, it can operate independently. Baidu Takeout is its first batch of key projects, and small-scale mutual entertainment is also the product of the incubation of the "Aircraft Carrier Plan".

On April 20, 2016, Baidu announced that its Baidu video business was officially operated independently, with the purpose of building the first PGC video platform in China. According to Xinhuanet reported in April, after operating independently, Baidu Video will focus on the construction of the PGC content platform, while continuing to provide network-wide video search and aggregation services to netizens.

In addition, Xinhuanet quoted industry analysts as saying that from building the video website iQiyi, investing in film and television producer and distributor Huace Film and Television and theater line Xingmei Media, and self-operating glutinous rice films, to introducing strategic investors and operating independently for Baidu Music and Baidu Video through the "Aircraft Carrier Plan", Baidu is vigorously expanding its cultural and entertainment territory, and in terms of content ecology, it adopts the "online + offline, film and television entertainment +PGC" strategy for comprehensive layout.

Ideals are beautiful, but reality is full of bumps. It has been nearly five months since Xiaodu Mutual Entertainment was spun off, but its industrial and commercial information still shows that Beijing Baidu Netcom Technology Co., Ltd. is a single shareholder.

The reporter inquired about New Culture's 2016 semi-annual report and learned that New Culture plans to invest a total of 410 million yuan in small-scale mutual entertainment, while the cumulative actual investment during the reporting period was 102 million yuan. The acquisition status of this asset shows that it is still under transaction.

Regarding the current status of the processing of Xiaodu Mutual Entertainment licenses and whether the website is still under construction, the reporter called the customer service number displayed on the website of Xiaodu Mutual Entertainment. The recipient said it was unclear and said that it was not the customer service department, but the finance department.

Editor: Nancy